Government further intensifies domestic borrowing in June

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The Treasury Office will increase domestic borrowing to P215 billion in June through treasury bills and weekly bond issues to take advantage of the strong market reception for longer debts.

In a May 26 memorandum to all eligible government securities brokers, National Treasurer Rosalia de Leon said a total of 75 billion pesos in treasury bills plus 140 billion bonds would be offered next month. .

The treasury bill auction will also take place every week in June, instead of the previous schedule twice a month. The Treasury’s domestic borrowing schedule for the month is about 26 percent higher than the P170 billion in April and May.

It will sell 35 billion pesos in bonds every Tuesday at auction during the month, for a total of 140 billion pesos.

The bondholders will be 20 years on June 1, seven years on June 8, 10 years on June 15 and five years on June 22.

“Previous auctions have been well received on long tenors, with investors looking for better returns,” said De Leon.

In the meantime, the weekly supply of treasury bills will be reduced to 15 billion pesos per week, from 25 billion pesos in April and May.

However, the Treasury has five weeks to auction the short-term debt securities from May 31, which will be issued to investors two days later or June 2, therefore included in the June borrowing program. The 91-day, 182-day, and 364-day benchmark IOUs will also be sold on June 7, 14, 21, and 28.

Last month and this month, the composition of treasury bills included 5 billion pesos over three months, 8 billion pesos over six months and 12 billion pesos over one year. record P3.03 trillion, the bulk of which amounting to P2.58 trillion would be borrowed from domestic sources, mainly through the sale of treasury bills and bonds. liquidity and currency risks. By the end of 2021, the Philippines’ outstanding debt will reach 11.5 trillion pesos, or 57.8% of gross domestic product (GDP).

At the end of March, the debt-to-GDP ratio peaked at 60.4% in 16 years, already exceeding what rating agencies considered the manageable public debt threshold of 60%, not thanks to the prolonged recession induced by the pandemic which spilled over into the first quarter of this year. INQ

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